Renewable energy: the share of renewable energy in the EU in 2004

The Commission Green Paper entitled "Towards a European strategy for the security of energy supply" highlighted the EU's high energy dependence. The EU now depends on imports to meet 50% of its energy needs. This will increase to 70% in 2030 with an increasing reliance on oil and gas. This situation presents many economic, political and environmental risks.

In this context, and even if conventional fossil fuels and nuclear power remain key sources of energy, the EU must play its part by promoting renewable energy.

ACT

Communication from the Commission to the Council and the European Parliament - The share of renewable energy in the EU - Commission Report in accordance with Article 3 of Directive 2001/77/EC, evaluation of the effect of legislative instruments and other Community policies on the development of the contribution of renewable energy sources in the EU and proposals for concrete actions [COM(2004) 366 final - not published in the Official Journal].

SUMMARY

This Communication assesses the development of renewable energy in the European Union. It serves three purposes:

• to implement the provisions of Directive 2001/77/EC under which the Commission is required to make a formal report evaluating the progress made by EU15 towards achieving national targets for 2010 for renewable energy sources;
• to assess the prospects for achieving the target of 12% of overall energy consumption being produced from renewable energy in EU15 in 2010;
• to put forward proposals for concrete actions at national and Community level to ensure the EU's renewable energy targets are achieved in 2010.

In order to promote progress, since 2000 the EU has, in a legislative framework, set two indicative targets for renewable energy:

• to increase the share of electricity generated by renewable energy to 22% in 2010 for EU15 (compared with 14% in 2000);
• to increase the share of biofuels in diesel and petrol used for transport to 5.75% in 2010 (compared with 0.6% in 2002).

The ten new Member States of the EU are obliged to implement the provisions of Directive 2001/77/EC on the production of electricity from renewable energy sources. To this end, indicative national targets for the share of electricity from renewable energy in each new Member State are set out in the Accession Treaty. These targets mean that the collective target for EU25 is 21%.

Commission Report on progress made at national level

Pursuant to Directive 2001/77/EC, all the Member States have adopted national targets on the share of electricity produced from renewable energy sources. With the measures that have been put in place, the Commission estimates that the share of renewable energy sources in EU15 is on course to reach 10% in 2010.

However, it is currently difficult to predict whether the policies carried out and the measures adopted in the EU will enable these targets to be reached by 2010. If the current trend continues, the rate of consumption of electricity produced from renewable energy in 2010 can still be extrapolated to between 18 and 19%.

According to the report, the situation varies considerably from one Member State to another. In general, countries can be divided into three groups having made different amounts of progress as regards renewable energy:

• Germany, Denmark, Spain and Finland have implemented an energy policy which should enable them to reach their national targets;
• Austria, Belgium, France, Ireland, the Netherlands, the United Kingdom and Sweden have begun adopting policies and measures which would also allow them to achieve their national targets;
• Greece and Portugal must improve their policies since these will not enable them to reach their targets.

Information is not available for Italy and Luxembourg. The situation in the new Member States will undergo an initial evaluation in 2006.

In terms of different sources of renewable energy used for electricity production, it seems that the EU should concentrate on developing wind, solar and biomass technologies.

• Wind energy: the European wind industry has 90% of the world equipment market. Germany, Spain and Denmark alone account for 84% of European production capacity.
• Biomass: the development of biomass technologies is hampered by the lack of policy coordination and insufficient funding. Only Denmark, Finland and the United Kingdom are experiencing significant growth rates for this energy source. However, in most of the new Member States there is a sound potential for the use of biomass to generate both electricity and heat.
• Photovoltaics electricity (solar): photovoltaic output is still limited; however, this energy form could in the long term be developed to a greater extent in the EU. This will only be possible if a reliable political framework is created allowing companies in the photovoltaic sector to make their investments profitable.

Supporting programmes and Member State actions

Over the last two years, Member States have implemented new policies in the field of renewable energy. Legal frameworks are more structured and financial conditions have become clearer. In this respect, the Community has only limited means for funding renewable energies. The following actions were undertaken:

• Intelligent Energy - Europe Programme (2003-2006): The "Intelligent Energy" programme is intended to improve energy efficiency (SAVE actions), to promote new and renewable energy sources (Altener actions), to support initiatives tackling the energy aspects of transport (STEER) and to promote renewable energy and energy efficiency in developing countries (Coopener);
• Sixth Research and Technical Development Framework Programme (2002-2006): The programme focuses on sustainable development and the knowledge-based economy. It concentrates on five research priorities: cost-effective supply of renewable energies, large-scale integration of renewable energy, eco-buildings, polygeneration and alternative motor fuels.

Energy efficiency is as important as renewable energy in increasing security of energy supply and reducing greenhouse gas emissions. Renewable energy policy began by setting an overall target (the 12% target).

In order to achieve this target, the Member States of the EU are required to promote biofuels and the use of renewable energy in heating systems. The fate of biofuels remains heavily influenced by tax exemptions. To date, seven Member States have either completely or partially exempted biofuels from taxes under European legislation: Germany, Austria, Spain, France, Italy, the United Kingdom and Sweden.

Biofuels are relatively expensive, although the additional costs which they incur are justified by benefits across several policy fields.

More effort must be put into using renewable energy for heating. This sector remains highly dominated by traditional biomass use (fuel wood). And yet heat produced by solar energy and the biogas sector has the potential for growth and development. Supporting policies are also needed to make the use of wood much more profitable and to promote other forms of biomass.

New initiatives for increased investment in renewable energy: new initiatives

According to a 2003 report, between EUR 10 to15 billion will need to be invested each year in order for 12% of energy in the EU to be produced from renewable sources in 2010. Over time, the development of each energy source has benefited from substantial public funding and risk support from Member States. Member States have different means at their disposal to support renewable energy sources, such as electricity feed-in tariffs, green certificates, market-based mechanisms, tax exemptions etc.

Supplementary action could be explored on the following fronts:

• the establishment of a new financial instrument which could be tailored to accommodate the diversity and specificity of the renewables and energy efficiency sectors. This instrument should support the first market applications of technologies of European relevance and could be the main component of the successor to the current "Intelligent Energy-Europe" programme;
• the future "Intelligent Energy-Europe" programme should also boost support for action at local and regional level. The aim is to enable Europeans to make informed decisions about energy and to help remove non-technological barriers to the use of clean energy;
• strengthening public support for research and technological development in renewables.

The other measures planned are:

• a Community plan for biomass: by the end of 2005, the Commission will put forward a coordinated biomass plan with a clear approach to securing adequate supplies of biomass through European, national and regional/local action in the fields of energy, agriculture, waste, forestry, industry, rural development and the environment;
• developing renewable energy in heating: the Community has already adopted directives on the energy performance of buildings and cogeneration. The Commission will bring forward further initiatives to accelerate the fulfilment of the potential of three key technologies (heating through efficient use of biomass, solar energy and geothermal energy);
• offshore wind policy: the Commission will review the obstacles and objections that may block the development of offshore wind energy as well as the environmental requirements which need to be met. It will also support research and development to improve turbine technology and the stability of the grid in order to increase the penetration of wind energy to over 20%;
• electricity from solar energy: the EU needs continued, targeted RTD funding to develop increasingly pollution-free production technologies, such as solar thermal electricity for which some promising pilot projects which have just been launched in southern Europe;
• using major Community financing instruments: from 2004 onwards, the Commission intends to place special emphasis on the deployment of renewable energy and energy efficiency by using the EU's structural and cohesion funds;
• placing biofuels on the market: Directive 98/70/EC on fuel quality lays down specifications which limit the blending of biofuels for petrol and diesel. Member States may require each company to place a given quantity of biofuels on their national market, but may not require that all fuel sold be blended with biofuels;
• timely data: official data on the contribution of renewable energy sources is currently available about 18 months after the end of the year in question. The Commission will make data available more quickly.

RELATED ACTS

Communication from the Commission to the Council and the European Parliament - Renewable energy road map - Renewable energies in the 21st century: building a more sustainable future [COM(2006) 848 final - Not published in the Official Journal].

Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services [Official Journal L 191 of 22.7.2005]

Directive of the European Parliament and of the Council of 6 July 2006 on establishing a framework for the setting of eco-design requirements for energy-using products and amending Council Directive 92/42/EEC [Official Journal L 114 of 22.7.2005].

Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC [Official Journal L 52 of 21.02.2004].

Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport [Official Journal L 123 of 17.05.2003].

Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity [Official Journal L 283 of 31/10/2003].

Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 on the energy performance of buildings [Official Journal L 1 of 04.01.2003].

Regulation (EC) No 2422/2001 of the European Parliament and of the Council of 6 November 2001 on a Community energy efficiency labelling programme for office equipment [Official Journal L 332 of 15.12.2001].

Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market [Official Journal L 283 of 27.10.2001].

Directive 2000/55/EC of the European Parliament and of the Council of 18 September 2000 on energy efficiency requirements for ballasts for fluorescent lighting [Official Journal L 279 of 01.11.2000].

Last updated: 22.11.2007